The global manufacturing purchasing managers' index (PMI) declined to 49.9 percent in April, 0.4 percentage points lower than in March, but slightly higher than the first quarter average of 49.6 percent, according to data released by the China Federation of Logistics and Purchasing (CFLP) on Monday.
Analysts said since the beginning of this year, the global economy is recovering at a modest pace, which has changed major economic organizations' expectations for global economic growth.
The Organization for Economic Cooperation and Development (OECD) recently raised its forecast for global GDP growth in 2024 to 3.1 percent from the previous 2.9 percent. Similarly, the International Monetary Fund (IMF) predicts the world economy to grow at 3.2 percent during 2024, an increase of 0.1 percentage points from its forecast earlier in January.
Experts said that global economic prospects remain fraught with uncertainties, largely generated from countries' monetary and fiscal policies, relatively weak demand growth momentum and geopolitical conflicts.
"In order to further consolidate the momentum of global manufacturing and economic recovery, I think it is necessary for major countries to strengthen both macro policy coordination and macro control, to ensure the stability of the foreign exchange market and the financial system. At the same time, efforts should be made to strengthen economic and trade cooperation, to lay a solid foundation for global economic recovery," said Xu Hongcai, deputy director of the Economic Policy Commission under the China Association of Policy Science.
Global manufacturing PMI down in April
The depreciation of Japanese yen has caused an old coffee shop in Kofu City, Yamanashi Prefecture of Japan to suffer rising financial strain due to surging import costs.
The coffee shop, with a 50-year history, is facing fund squeeze. The owner, 82-year-olld Hajime Yoneyama said that the depreciation has led to increased prices for imported raw materials, particularly coffee beans sourced mainly from Brazil, Vietnam, and Colombia, resulting in a 20 percent surge in purchase costs.
"The purchase price (of coffee beans) has increased by 20 percent. I feel that the prices of vegetables and oil have also increased by at least 20 percent. Now the prices of these things continue to rise, with no sign of stopping. The expenditure situation of the store may become more severe in the future," said him.
Yoneyama said that he had to raise the prices to sustain the coffee shop's operation.
"Recently we had to raise the price. Previously, a cup of coffee cost 500 yen. It's no longer sustainable (without price increases) and now it's up to 600 yen," said the owner.
Furthermore, in an effort to cut costs, the elderly Yoneyama works with just one employee, yet the store business kept crippling. He said that a significant portion of his pension funds is used to cover store expenses and employee wages.
Locals worry that if the weak yen trend persists, the pressure on livelihoods will further intensify.
"The prices of everything are increasing, food, drink, vegetables. It would be great if there was a solution. Medical supplies are also an issue that needs to be considered. I do worry about what the future will bring," said a local resident.
"Not only are labor costs rising, but gas costs are also rising, so operators need to cut expenses, such as advertising expenses, and the work that they originally paid to hire people to do may now be borne entirely by the operators themselves," said another resident.
Japan’s time-honored coffee shop face fund squeeze due to weakening yen
